Despite Economy, Not-Only-For-Profit Business Is Thriving

Any way you slice it, to say that the past two years has been economically "unkind" to businesses both large and small would be an understatement. From giant corporations dealing with cutbacks and layoffs, to local Mom & Pop's shutting their doors for good, the American dream has collectively taken a hit that is both real and palpable. Facing an unemployment rate that is hovering around 10%, with some experts predicting 11% by the end of 2010, most CEOs across the United States are having to make tough decisions on an almost daily basis.

But despite these hard times, a few companies who have chosen to swim against the current by actually giving back some of what they earn are recording record profits. But these aren't the corporate donations carefully orchestrated by a clever PR department looking to bolster the company image.

This seldom-used business model, referred to as "Not-Only-For-Profit", sets aside a percentage of a company's sales that automatically go to the charities and causes that need them the most. Instead of the inconsistency of giving money when it's convenient, or funds that never find their way into the hands of the hardest hit individuals, these companies have preemptively committed themselves to helping out. And their methods, while unorthodox in the business community, have produced some surprising results.

KIND Snacks, a healthy snack company based in NYC has seen nothing but growth in the last 2 years. KIND was conceived in 2003 by Daniel Lubetzky, a social entrepreneur that TIME Magazine recognized in 2009 among "25 Responsibility Pioneers" and BusinessWeek named among "America's Most Promising Social Entrepreneurs."

"The path to KIND began 15 years ago when I started PeaceWorks, Inc., a 'not-only-for-profit' company that fosters economic cooperation among neighbors striving to co-exist in conflict regions worldwide. After launching several successful food products with PeaceWorks, I still found myself in search of a snack that was wholesome, tasty and healthy - all at the same time. So in 2003 I conceived KIND as a brand of snacks that are 'KIND to your body, your taste buds, & the world,'" Lubetzky claims.

"What we like to do is to build models where business and social interests are totally aligned and reinforce one another. It is not easy to do," Lubetzky says. "A lot of the area of 'corporate social responsibility' is structured around perceived sacrifices to the bottom line in order to address other important societal objectives. The fun stuff comes when you are able to innovate through ventures whose financial and social objectives reinforce one another."

Another shining example is Stubbs BBQ out of Austin Texas. Stubbs is making headlines around the U.S. with it's "Feed the World" tour. Instead of setting up tents and trailers in shopping centers and town squares, Stubbs CEO Kurt Koegler instead chose to set up shop in homeless shelters. He explains, "It's significantly improved morale by providing an authentic purpose that all of our employees have identified with. It's also provided a way to differentiate Stubbs from the competition in a real and authentic way...primarily because of who Stubbs was and his love of people and love of feeding them". At first, the tour idea didn't resonate with all of Stubbs' board members. According to Koegler, "The majority of the Board did not support a project that they viewed as a reduction of profits with no business purpose, however that soon changed when consumers responded with it all over the country with the result being record levels of revenue month after month."

According to the American Association of Fundraising Counsel (AAFRC), the sum of gifts by individuals and charitable bequests in 2008 was $251.94 billion, a full 82% of the total philanthropic giving in 2008. "The sobering reality is that corporate America contributes only 5% of total giving annually to non-profits," says non-profit consultant and organizer Michael Clearman. "What that says about the heart of corporations is, in my opinion, a question that only their leaders can answer. In my years as a professional fundraising consultant, I have learned that the greatest source of philanthropic resources is the individual human heart."